investor presentation results fy2016 -...

© 2017 Wirecard AG 1

Investor Presentation –

Results FY2016

6 April 2017


Content

1. Highlights

2. Industry and regions

3. Products and solutions

4. Mergers and acquisitions

5. Outlook

6. Financial data


1

Highlights


Wirecard at a glance

Highlights

61.7 EUR bn processed transaction volume worldwide

Outstanding track record with continuing growth and strong

fundamentals

Innovation leader with leading internet and mobile payment technology

Global M&A strategy adding to organic success

Unique value chain with fully integrated and licensed banking operations

~ 27,000 large and medium sized merchants

~ 150,000 small sized merchants


Key figures FY2016

Highlights

Results in EUR mn (except where stated) 2016 2015 Change

Transaction volume (in EUR bn) 61.7 45.2 37%

Revenues 1,028.4 771.3 33%

EBITDA 307.4 227.3 35%

EBIT adjusted* 268.3 197.4 36%

EBIT 235.2 172.8 36%

Earnings after taxes 266.7 142.6 87%

Earnings after taxes adjusted** 176.9 142.6 24%

Operating cash flow*** 283.0 199.7 42%

Free cash flow**** 209.9 145.2 45%

Earnings per share (in EUR, undiluted) 2.16 1.16 86%

Earnings per share adjusted** (in EUR, undiluted) 1.43 1.16 23%

EBITDA guidance for FY2017 of 382 - 400 EUR mn

Proposed dividend of 0.16 EUR per share

* Adjusted for amortisation (M&A related)

** Adjusted for Visa Europe

*** Consolidated cash flow from operating activities (adjusted)

**** Cash flow from operating activities (adjusted) less operative CAPEX


Organic versus M&A1 related growth FY2016

Highlights

1 Payment business of GI Retail Group, India; Wirecard Brasil, Brazil; Provus Group, Romania

Transaction volume

growth

Total

Organic

M&A

• GI Retail

• Wirecard Brasil

• Provus

36.5%

30.2%

6.3%

4.4%

1.2%

0.7%

Revenue growth

33.3%

20.6%

12.7%

9.5%

2.1%

1.1%

EBITDA growth

35.2%

27.1%

8.2%

6.6%

0.5%

1.1%


Global mega trends driving Wirecard´s growth

Highlights

Substitution of POS transactions by mobile and internet

transactions

Transition from cash transactions to electronic card

transactions

Transition from non-real-time transactions to real-time

transactions

Internet technology as convergence driver between all sales

channels – POS, mobile and internet – omni-channel

1

2

3

4


Wirecard´s strategy

Highlights

Driving convergence between online,

mobile and POS front-ends

using innovative internet technology

Globalisation

Constant extension of

value chain and innovative internet-

driven value added services


Value chain

Wirecard´s USPs

Highlights

Strong value chain

with end-to-end fully digitised

acquiring and issuing

leading to gross margin advantages

Leading 360° risk management: raising

conversion on average by more than 5%

and reducing default by up to 50%*

Most advanced in rolling out

Wirecard´s platform and innovations

on a global scale

Risk

management

Global reach

* Depending on business model, industry and sales channel


ISS

UIN

G

FRAUD / AML

MANAGEMENT

BALANCE MGMT.

(STORED VALUE

ACCOUNT)

PERSONALIZATIONTRUSTED SERVICE

MANAGER

TRANSACTION

AUTH. / CLEARING

ISSUING LICENSE and many more

KNOW-YOUR

CUSTOMER

CREDIT FACILITY

MANAGEMENTPEER-TO-PEER

CUSTOMER DATA

MANAGEMENT

MULTI-CHANNEL WALLET

PLATFORM

ISSUING PROCESSING

PLATFORM

CONTEXTUAL ADVERTISINGVALUE ADDED

SERVICESLOYALTY PROGRAMS COUPONING SERVICES

SMS / USSDMOBILE FRONTEND

SOLUTIONSSIM TOOLKIT / J2ME SMARTPHONE APPS

HARDWAREMULTI-CHANNEL

FRONTEND

VALUE ADDED

SERVICES

FINANCIAL SERVICES LICENSE

ACQUIRING LICENSE (more than 45 payment solutions)

FRAUD / AML

MANAGEMENT

TERMINAL

MANAGEMENT

NETWORK

OPERATIONSTRANSACTION

AUTH. / CLEARING

ACQUIRING PROCESSING

PLATFORM

CUSTOMER DATA

MANAGEMENT

WALLET CONTENT

MANAGEMENT

SMARTPHONE SDK

CONTEXTUAL

ADVERTISING

VALUE ADDED

SERVICESLOYALTY PROGRAMS MINI ATM

ONLINE API

TRANSACTION

ROUTING

COUPONING

SERVICESTRUST EVALUATION

SUITE

MULTI-CHANNEL PSP

PLATFORMRISK MANAGEMENT FRAUD PREVENTION MERCHANT

ANALYTICS

MERCHANT

RECONCILIATION

SMARTPHONE SDK BATCH API

Wirecard´s end-to-end payment ecosystem –

fully digitised global acquiring and issuing

Highlights

AC

QU

IRIN

G


360° risk engine

Highlights

RISK

ENGINE

HOTLIST

CONNECTORS

FRAUD

PREVENTION

SUITE

IP GEO-

LOCATION

DEVICE

FINGERPRINT

CUSTOMER ID

SANCTION

LIST

ADDRESS

EMAIL

ADDRESS

ADDRESS

VALIDATION

PEP CHECK

TRUST

EVALUATION

SUITE

FURTHER

PARA-

METERS

ORDER

HISTORY

PAYMENT

HISTORY

CREDIT AGENCY

GATEWAY

Region 2

Region 4

Region 3

Region 1

SCORE-CARD

CREDIT LIMIT

PAYMENT CARD

VALIDATION

One Platform for multiple purposes

• Platform for decision making

• Modular design

• Flexible setup

• One interface to the merchant

PATTERN

DETECTION

SELF-LEARNING

ALGORITHMS


Global reach

Highlights


Operative highlights FY2016

Highlights

Strong customer gains and extension of existing business relationships translate into

continuing organic growth of Wirecard

New customer gains in second half 2016 with a potential transaction volume of 9.5 EUR bn

Examples of customer gains, business extensions and new partners

Microsoft Cloud Platform Azure, Siemens Mobility, Verlagsgruppe Handelsblatt, Visa Europe Collab, ÖBB,

T-Systems, Eurotrade Flughafen München Handels-GmbH, Takko, MyOrder B.V., Ingenico, Verifone, Apple Pay,

Sabre, Commerzbank AG, Wizz Air, Miles and More GmbH, The Body Shop, Printemps, O2, Burger King, Airberlin,

Europe Net, savedroid, Future Finance, WMF, Enterprise Rent-A-Car, Tamaris, Awinta, TeamViewer, Wargaming.net,

Taxi.de, LogoYazilim, Otelz.com, Cuscal, ComfortDelGro, Eleos Web, Bloyalty, DCB Bank, RBL Bank, Lidl, Mondo,

Paygoo, Curve, Travelex, Carrefour, Conferma

Various omni-channel initiatives

In cooperation with the WMF Group, Wirecard is realising the integration of an omni-channel shopping solution in the

WMF branches. The solution enables WMF customers to view products in the store, order them directly online in the

store and have them delivered to their homes.

Furthermore, the cooperation with eurotrade Flughafen underlines Wirecard's international convergence strategy.

Wirecard has integrated Alipay Barcode Payment into eurotrade’s central checkout system for this purpose. Another

customer who accepts Alipay payments via Wirecard is Miles & More GmbH, who accept barcode payment in their

Lufthansa WorldShop Stores via the new iOS app “Scan Alipay”. In addition, the British company The Body Shop

and the French company Printemps Group with its 19 department stores in France have been acquired as

customers.


2

Industry and regions


Transaction volume – industry view (1/2)

Strong growth across all industries with well diversified

customer portfolio and low customer concentration


Travel & mobility, 18.8%

Digital goods, 34.3%

Consumer goods, 46.9%

Transaction volume1 industry allocation

Travel & mobility

• Includes airlines, hotel chains, travel

portals, tour operators, ferries, car

rental and transportation companies

• Travel & mobility up 2.5 EUR bn, with

28.0% yoy growth

Consumer goods

• Includes B2C and B2B physical

products

• Consumer goods up 8.2 EUR bn, with

39.5% yoy growth

Digital goods

• Includes digital goods such as internet

portals, download and streaming

services, telecommunications, SaaS

and app providers

• Digital goods up 5.7 EUR bn, with

37.0% yoy growth

28.0% yoy growth

39.5% yoy growth

37.0% yoy growth

1 Transaction volume: mainly acceptance and issuing means of payment along with associated value added services


Transaction volume1 – industry view (2/2)


1.49

1.67

1.81

2.05

2.28

0.5

1.0

1.5

2.0

2.5

2012 2013 2014 2015 2016

Volu

me in E

UR

mn

Average transaction volume per merchant (large and medium sized only)14% CAGR

(2012-2016)

Adding large scale merchants enables Wirecard to continuously increase

transaction volume per merchant

1 Transaction volume: mainly acceptance and issuing means of payment along with associated value added services for large and medium sized merchants


Transaction volume1 – geographic view 2


In EUR mn (except where stated) EuropeOutside

EuropeTotal

Transaction volume in EUR bn 42.1 19.6 61.7

Revenue 582.7 445.7 1,028.4

→ Hardware related 3.8 30.2 34.0

→ Other non-TX-related 27.5 12.2 39.6

Total non-TX-related revenue 31.2 42.4 73.6

Total TX-related revenue 551.5 403.3 954.8

Average transaction margin 1.3% 2.1% 1.5%1.7

1.6

3.6

0.0

2.1

2.2

11.2

2.8

17.3

13.8

34.0

45.2

3.0

2.4

5.2

2.2

3.6

3.2

19.6

3.1

23.1

15.9

42.1

61.7

thereof MEA

thereof Americas

thereof APAC other

thereof India

thereof Indonesia

thereof Singapore

Outside Europe

thereof Europe (non EU)

thereof EU (w/o GER)

thereof Germany

Europe

Total

In EUR bn

Transaction volume - global breakdown

2016 2015


2 Geographic view is based on merchant location


Europe Outside Europe Total

Transaction volume2in EUR bn 8.6 3.0 11.6

Revenue in EUR mn 86.5 70.2 156.7

Average transaction margin 1.0% 2.4% 1.4%



Revenue in EUR mn 227.4 117.6 345.0




Revenue3in EUR mn 237.5 215.6 453.1


Putting it together – industry and geographic view1 FY2016


Consumer goods

Digital goods

Travel & mobility

1 Geographic view is based on merchant location


3 Adjusted for non-transaction related revenue such as hardware and other services


3

Products and solutions


Key innovations and product development (1/2)


boon.

Wirecard’s Host Card Emulation (“HCE”) app for mobile payment – redefining

smartphone payments. As a digital payment solution for Android smartphones

boon combines innovative payment functions, loyalty points and couponing as

well as a range of personal finance services. The app communicates with

point of sale terminals via near field communication (NFC). Boon was

successfully launched in Germany, Austria, Spain, Belgium, Ireland, France,

Switzerland and the Netherlands for Android users.

Since May 2016 boon was also launched as a fully digitised credit card for

Apple Pay in Great Britain, France, Switzerland and Ireland.

Wirecard Checkout Portal

Higher conversion rate through targeted search engine marketing: With Google

AdWords, Wirecard AG is offering with its partners a new premium service for its

Checkout Portal, a fully automated solution that enables online payment

processing for small and medium-sized businesses (SMB) as well as

marketplaces.

Wirecard acquired SUPR, in order to expand the Checkout Portal to include further

value added services in the area of omni-channel sales. SUPR is working on the

vision of decentralised e-commerce to enable retailers to sell their goods via so-

called widgets directly on blogs and social networks independently of an online

shop. The innovative SUPR solutions will be integrated into the Wirecard Checkout

Portal and rolled out Europe-wide as part of a complete ecosystem.



CONNECTED POS

Connected POS

Connected POS technology is Wirecard’s central and intelligent

platform for value added services at the Point of Sale (POS).

The solution brings internet technology to the POS and enables

merchants to digitise various areas of business such as

payment, loyalty solutions or the evaluation of data.

Connected POS also powers Wirecard’s Alipay integration into

merchants such as The Body Shop, Printemps or WMF.

Key innovations and product development (2/2)

mPOS

In todays retail environment, mobile point of sale solutions are

more than a transaction authorization process – mPOS is

becoming a core driver for in-store conversion in combination

with inventory & product information.

Retailers are investing heavily in mobile technologies to create

a personalized shopping experience while bringing the checkout

to the customer. Wirecard operates its own mPOS program

attracting merchants of all sizes that follow a mobile first

approach.


4

Mergers and acquisitions


Overview of recent M&A activity


Citi Prepaid Card

Services in North

America

Merchant acquiring

services of Citigroup in

APAC

MyGate in South Africa

• A leading merchant acquiring business across 11 countries in APAC

• Client base of more than 20,000 merchants incl. segment leading corporate clients

• Strong cross- and upselling opportunities due to Wirecard’s innovative payment

ecosystem

• Synergies of > USD 7 mn annually

• Estimated EBITDA contribution of > USD 20 mn for the 12 months after closing

• Signing March 2017

• MyGate is a leading payment service provider in South Africa

• Supplements existing product portfolio of Wirecard in South Africa

• Employees: 21

• Cash payment of 18.2 EUR mn, further earnouts up to 4.9 EUR mn

• Expected EBITDA 2017: 2.0 EUR mn

• Signing and closing March 2017

• Leading position in institutional funded prepaid card issuing with more than 2,500

client programs launched

• Global expansion with market entry U.S.

• Employees: 120

• Estimated EBITDA margin 2017 approx. 20%

• Estimated EBITDA contribution 2017 > USD 20 mn (before integration costs)

• Estimated integration costs: 5.0 USD mn

• Closing March 2017


EBITDARevenue

Track record of recent M&A activity

Payment business of

GI Retail Group, India


73.5 EUR mn

FY2016

(consolidation as of

December 30, 2015)

14.9 EUR mn

FY2016

(consolidation as of

December 30, 2015)

Wirecard Brasil, Brazil

16.2 EUR mn

FY2016

(since consolidation as of

February 22, 2016)

1.2 EUR mn

FY2016


February 22, 2016)

Provus Group, Romania

8.5 EUR mn

FY2016


February 29, 2016)

2.4 EUR mn

FY2016


February 29, 2016)


Wirecard India – driving financial inclusion


150kAGENTS

ICASH( PPI LICENSE )

MTSSINTERNATIONAL

REMITTANCE

LICENSE

BANK( FULL LICENSE )

MOBILE WALLETby

WIRECARD

mPOS /

MINI ATMs

APPSTORE( SMARTSHOP )

ACQUIRING(via referral/ BIN

sponsor)

AUTHORIZED

DEALER,

CATEGORY II(LICENCE UPGRADE

BY RBI)

LOANS( NBFC, BANK )

Acquired

business

Post M&A

Future

steps

SUCCESSFUL

FY2016

PSPPAYMENT PLATFORM

by

WIRECARD

FULLY DIGITISED

OPEN LOOP

ISSUING


5

Outlook


Real-time payments

Convergence of all

sales channels

Strong prospective market growth of 16% to 17% within

Wirecard´s core geographies as well as its industry mix for 2017

Market environment

Outlook

Ongoing digitalisation

Transition from cash to

electronic payments


Company guidance 2017

Outlook

Guidance is based on

• Growth of the European e-commerce market and additional global growth drivers

• Increase of processed transaction volume with existing and new clients

• Economies of scale

• Contribution from recent acquisitions

Detailed break down of guidance mid-point of 391 EUR mn

• Organic growth of 24%

• >13.0 EUR mn EBITDA contribution from Citi prepaid (based on 20 USD mn and integration costs

of 5 USD mn)

• EBITDA guidance for FY2017 of 382 to 400 EUR mn

• Proposed dividend of 0.16 EUR per share


Wirecard´s visionary playing field

Outlook

85% cash transactions worldwide

… whereas only 15% of all transactions are electronic

…with only 6% to 7% of all electronic transactions being

fully digitised

Leaving an enormous market potential for Wirecard


Vision 2020

Outlook

TX volume

> EUR 190 bnRevenue

> EUR 2.5 bnEBITDA – margin

30-35%FCF conversion to

EBITDA

> 65%


6

Financial data


Financial highlights FY2016

Financial data

in EUR k 2016 2015 Change

Revenue 1,028,358 771,340 33%

EBITDA 307,363 227,315 35%

EBIT adjusted* 268,322 197,420 36%

EBIT 235,188 172,844 36%

Tax 36,091 23,023 57%

Earnings after taxes 266,749 142,646 87%

Earnings after taxes adjusted** 176,888 142,646 24%

EPS (undiluted) in EUR 2.16 1.16 86%

EPS adjusted** (undiluted) in EUR 1.43 1.16 23%

Operating cash flow*** 283,030 199,685 42%

Shareholders’ equity 1,474,963 1,280,513 15%

Total equity and liabilities 3,482,062 2,935,501 19%

Employees**** as of 31.12.2016 / 31.12.2015 4,002 3,096 29%

thereof full-time employees 3,697 2,833 30%

thereof part-time employees 305 263 16%

*Adjusted by amortisation (M&A related)

**Adjusted for Visa Europe

*** Consolidated cash flow from operating activities (adjusted)

**** Thereof 340 employees of Wirecard Brasil, Brazil; Provus Group, Romania


Revenue and EBITDA – 5 year view

Financial data

25.0%

26.0%

27.0%

28.0%

29.0%

30.0%

0

200

400

600

800

1000

1200

2012 2013 2014 2015 2016

EUR mn

Financials - 5 year view

Revenue EBITDA EBITDA margin

26% CAGR

(2012-2016)

30% CAGR

(2012-2016)

Strong 5 year

revenue/EBITDA growth and

margin expansion

due to scalability of

Wirecard´s platform and

cross selling effects


Consolidated income statement

Financial data

in EUR k 2016 % of revenues 2015 % of revenues

Revenues 1,028,358 771,340

Own work capitalised 30,201 28,293

Cost of materials -530,761 51.6% -418,935 54.3%

Personnel expenses -129,852 12.6% -96,378 12.5%

Other operating expenses -97,888 9.5% -62,665 8.1%

Other operating income 7,502 0.7% 5,659 0.7%

Income from investments using equity method -197 0.0% n/a n/a

EBITDA 307,363 29.9% 227,315 29.5%

Amortisation and depreciation (M&A adjusted)* -39,042 3.8% -29,895 3.9%

EBIT adjusted* 268,322 26.1% 197,420 25.6%

Amortisation (M&A related) -33,133 3.2% -24,576 3.2%

EBIT 235,188 22.9% 172,844 22.4%

Financial results 67,651 -7,175

Income tax -36,091 ** 11.9% -23,023 ** 13.9%

Profit after Taxes 266,749 25.9% 142,646 18.5%

* Adjusted by amortisation (M&A related)

** Taxes on income and profit with regards to Earnings before Taxes (EBT)


Balance sheet

Financial data

Assets in EUR k 31.12.2016 31.12.2015

Non-current assets 1,386,438 1,280,261

Goodwill 534,892 489,301

Customer relationships 392,329 385,451

Internally gen. intangible assets 99,224 80,639

Other intangible assets 81,682 65,869

Deferred tax assets 2,657 862

Other property, plant & equipm. 44,656 30,987

Fin. assets/ int. bearing securities 230,999 227,152

Current assets 2,095,624 1,655,240

Receivables of acquiring business

402,423 334,055

Trade receivables 190,185 113,204

Cash and cash equivalents 1,332,631 1,062,968

Interest-bearing securities 156,493 133,128

Other 13,893 11,885

Total assets 3,482,062 2,935,501

Equity and liabilities in EUR k 31.12.2016 31.12.2015

Shareholders´ equity 1,474,963 1,280,513

Liabilities 2,007,099 1,654,988

Current provisions 3,914 1,421

Tax provisions 24,276 14,087

Liabilities of acquiringbusiness

404,767 333,924

Trade payables 34,920 25,988

Interest-bearing bank loans 594,541 370,725

Deferred income taxes 59,747 53,266

Other non-current liabilities 31,425 71,912

Other current liabilities 119,505 201,201

Customer deposits 734,003 582,464

Total equity and liabilities 3,482,062 2,935,501


Net cash (short- and long-term)

Financial data

*

In EUR mn

0

500

1,000

1,500

2,000

2,500

Cash and cashequivalents

Interest-bearingsecurities and

fixed-termdeposits

Receivables ofacquiring

business andtrade

receivables

Current interestbearing

liabilities/otherliabilities

Customerdeposits(banking

operations)*

Liabilities ofacquiring

business andtrade payables

Net cashposition short

term - Wirecard

Non-currentfinancial assets

Non-currentinterest bearingliabilities / other

liabilities

Net cashposition long

term - Wirecard

In EUR mn

Net cash bridge FY2016

1,333 3

*Customer deposits break down in EUR k 31.12.2016

Customer deposits - balance sheet amount 734,003

thereof in long-term interest bearing securities -42,558

thereof in interest bearing securities and fixed-term deposits -156,493

Customer deposits relevant for net cash calculation 534,953

593-135

-535

-440

819

379

-611171


Income tax analysis

Financial data

in EUR k 2016 in % of ebt 2015 in % of ebt

Earnings before tax (EBT) 302,840 165,669

Tax on income and profit -36,091 11.9% -23,023 13.9%

thereof impact from deferred tax 1,694 -0.6% -1,109 0.7%

thereof tax to be paid -37,785 12.5% -21,914 13.2%

Paid tax on income -24,544 -21,892

thereof income tax -29,907 -21,892

thereof capital gain tax on dividends 5,363

in EUR k 2016 in % of ebt 2015 in % of ebt

Earnings before tax (EBT) adjusted* 211,265 165,669

Tax on income and profit adjusted* -34,377 16.3% -23,023 13.9%

thereof impact from deferred tax adjusted* 1,694 -0.8% -1,109 0.7%

thereof tax to be paid adjusted* -36,071 17.1% -21,914 13.2%

*Adjusted for Visa Europe


Cash flow and conversion

Financial data

Free cash flow in EUR k 2016 2015

Cash flow from operating activities

(adjusted)

283,030 199,685

Operative CAPEX 73,160 54,477

Free cash flow 209,870 145,208

Cash conversion in EUR k 2016 2015

Free cash flow 209,870 145,208

Earnings after tax* 176,888 142,646

Cash conversion in % 118.6 101.8

* Adjusted for Visa Europe


FinTech

Financial data

TechnologyPayment processing

Cards and accounts

POS (mPOS and connected POS)

Banking license

E-money license

Acquiring and issuing licenses

Account management

Couponing and loyalty

Risk & fraud

White label frontend solutions

Call centre support

Licenses

Value added

services

Wirecard as a global technology company with a fully licensed bank is

THE preferred partner for FinTech companies and provides services in

the area of…

Selective provision of

financing - based on detailed

individual assessments and

suitable security measures -

by the cash cycle of

Wirecard Bank…

…leading to substitution of

deposits/interest bearing

securities by „FinTech-loans“

in selected cases to optimise

interest income in a

low/negative interest rate

environment


THANK YOU

FOR YOUR ATTENTION


Investor Relations

Iris Stöckl: [email protected]

IR-Team: [email protected]

T: + 49 (0) 89 4424 1788

Wirecard AG

Einsteinring 35

85609 Aschheim / Munich

Germany

Contact


Disclaimer

This presentation contains explicit and implicit forward-looking statements concerning Wirecard AG, its affiliated

companies and their business. These statements are subject to various known and unknown risks, uncertainties and

other factors due to which the actual events, financial conditions, performances and achievements of Wirecard AG

may differ substantially from those expressed in such explicit or implicit statements. Wirecard AG makes these

statements at the time of the publication of the presentation and is under no obligation to update the forward-looking

statements in this presentation including on receipt of new information or on occurrence of future events or for other

reasons. However, Wirecard AG, may change in its own free discretion any forward-looking statements should

relevant factors change.

The forward-looking statements from third parties’ surveys, in particular without being limited

to research reports and analysts’ statements, may prove to be incorrect. Reference to such third parties’ surveys

is provided for information only and does not imply any agreement with or consent to the content of such surveys or

the information, opinions or conclusions contained therein. Wirecard AG accepts no liability for the selection,

completeness or correctness of third parties’ studies.

Wirecard AG mostly publishes its figures in thousands of euro (kEUR). The use of rounding means that it is possible

that some figures do not add up exactly to form the totals stated, and that the figures and percentages do not exactly

reflect the absolute values on which they are based.

This presentation is no offer for the sale and no invitation for offers of purchase or for subscription to of shares of

Wirecard AG but is provided for information only.

Financial data (IAS/IFRS) refers to the Reports of Wirecard AG published on our website:

ir.wirecard.com

investor presentation results fy2016 -...

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